Break-even ROAS Calculator

Find the advertising return needed to cover your stated variable costs.

← All 12 tools

YOUR RESULT

Ready when you are.

Enter your own values and use the button to see the result.

Runs on your device. No sign-in and no data upload.

How this tool works

Contribution margin = (revenue − variable costs) ÷ revenue. Break-even ROAS = 1 ÷ contribution margin.

Understand the result

Include product, fulfilment, payment fees and expected return costs as applicable. This simple per-order model excludes fixed overhead and taxes unless you allocate them into costs. A non-positive contribution margin has no finite break-even ROAS.

How to use the Break-even ROAS Calculator

Choose a currency label. It only affects how the numbers are displayed.
Enter revenue per order. Use your average order value — the amount a customer actually pays you, excluding tax you pass on to the government.
Enter variable cost per order, excluding ads. Add up everything you spend each time an order is fulfilled: product or supplier cost, packaging, shipping, payment gateway fees, app or platform fees charged per order, and an allowance for returns or refunds.
Press Calculate. The tool shows your contribution margin and the minimum ROAS you need from ads to avoid losing money on each order.

The formula

Contribution margin = (Revenue − Variable costs) ÷ Revenue
Break-even ROAS = 1 ÷ Contribution margin

If your ads return exactly the break-even ROAS, the revenue they generate covers product costs and the ad spend, and nothing is left over. Anything above it is margin you can use for overheads and profit; anything below it means each sale is costing you money.

Worked examples

Perfume store: average order $60, product + packaging $18, shipping $7, payment fees $2. Variable cost = $27. Margin = (60 − 27) ÷ 60 = 55%. Break-even ROAS = 1 ÷ 0.55 = 1.82x.
Dropshipping store with thin margins: order $35, supplier + shipping $24, fees $1.50. Margin = 27%. Break-even ROAS = 3.7x. A campaign at 3x ROAS looks fine in Ads Manager but loses money on every order.
Digital product: order PKR 3,000, payment fee PKR 90. Margin = 97%. Break-even ROAS ≈ 1.03x, so almost any positive return is profitable per order.

How to use the result

Set a target ROAS above break-even. Many store owners add a buffer of 20–50% for overheads and profit. With a break-even of 2x, a target of 2.5–3x is a sensible starting point.
Compare campaigns fairly. Check each campaign’s actual ROAS (from the ROAS calculator) against this number before scaling or pausing it.
Improve the margin, not just the ads. Raising prices slightly, bundling products or negotiating supplier costs lowers your break-even ROAS and makes every campaign easier to run profitably.

Limits of this model

This is a simple per-order model. It does not include fixed costs such as rent, salaries, software subscriptions or your own time, and it does not account for repeat purchases. If customers usually buy again, you may accept a lower ROAS on the first order — but only when you have real repeat-purchase data to support that decision.

Frequently asked questions

Should I include shipping I charge the customer?

If the customer pays shipping, include it in revenue per order and include your actual shipping cost in variable costs. Keep both sides consistent.

Why is my break-even ROAS so high?

A high break-even ROAS means your margin is thin. Below roughly 30% contribution margin, paid ads become difficult to run profitably, so review your pricing and costs first.

Is break-even ROAS the same for every product?

No. Each product has its own margin. If your catalogue mixes high- and low-margin items, calculate break-even ROAS per product or per collection.